The Measurement and Impact of Uncertainty
The study of policy uncertainty has increased exponentially across the economics and finance profession as of late, with papers across sub-disciplines finding uniformly that uncertainty has a negative effect on country growth paths. However, the somewhat nebulous term "uncertainty", and why such uncertainty is of relevance right now, has been only explored at a facile conceptual (if in-depth methodological) level. The purpose of this brief paper is to introduce some conceptual and definitional clarity to the idea of "uncertainty", spelling out clearly what different facets it entails and how these facets may influence economic variables. Focusing in particular on economic policy and institutional uncertainty, this paper is meant to serve as an introduction to the field but also serve as a call for future research. (original abstract)
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